Thursday, October 16, 2008

Simple Pleasures......

It was a laidback weekend. I dropped my car for service and I needed a ride back. Usually, I would take an auto to get home. As I was waiting for an auto, I saw four public buses in a line heading towards Besant Nagar. Like a spell cast on me, I spontaneously boarded one of those buses. As I came back to my normal senses, I was a bit tensed to think that I might not have any change other than 100 notes.

Fortunately I had some short change. I realized that I have boarded a public bus after over a decade!! I saw people boarding the bus with oversized baggage jostling with anyone on their way, ladies laughing about a harmless bump into a man as the driver slammed on the brake and yelled at a pedestrian.

It brought all the wonderful memories of my younger days when the very same public bus was the way of life for me once. I was very relaxed, perhaps, because it was not crowded. I felt a lively happy atmosphere. Having got into the habit of travelling in an AC car and feeling sorry for the people travelling in a bus, somehow, now, I felt that I am the one who should be pitied. That moment, I decided to take my son (three and half years old) on the bus to get the car back from the service station.

I yelled, as if we were going for a picnic, “Who is coming in a bus?!” My son said, “me, me, me….” Then he asks, “What bus?” I realized how insulated he was from the real world. That was his first time on a bus. So we board the bus. He never blinked once. It seemed like a ride of a lifetime for him. I got him a window seat and he was very excited. Just like any other three year old, he kept on asking questions. At times, he clutched my hands on seeing some strange looking big people. As it was a short ride, I had a hard time convincing him to get off the bus.
I spent Rs. 6 two-way rather than spending Rs. 100 two-way. This made me wonder about our lifestyle. How we spoil ourselves and then blame the system. Overall, I felt good about myself and there was something healthy about it.

Sunday, October 12, 2008

Economic orthodoxy was built on superstition

I was intrigued by Madeleine Bunting’s article that featured on The Hindu/Guardian Newspapers last week. It revolves around the idea that neoliberalism is a corrupt mythology that is in tatters and the crisis of conviction is profound.

In the 90’s, during the technology boom, the entire financial world could not have afforded to ignore even the simplest comments made by one man. Alan Greenspan. The article claims that Alan Greenspan has wrote “the past decade has seen mounting global forces quietly displacing government control of economic affairs.” He blithely continued that the greatest danger facing the economy was that “some governments, bedeviled by emerging inflationary forces, will endeavor to reassert their grip on economic affairs.” As the financial crisis started unfolding, Alan Greenspan did a gigantic volte-face as he pleaded for government to do just that – reassert its grip in the form of the bail-out.

Friedrich Hayek, an influential Austrian economist, in his book (The Road to Serfdom), brought out the essence of neoliberalism. Friedrich Hayek is considered to be the father of a model of economic management which has made the mighty financial institutions collapse like a pack of cards.

Scary!! These are the people to whom the financial world looked up to for direction. Even more terrifying is the fact that this turmoil did not originate from a third world country. The common public is occupied with the daily grind of their simple lives, believing that the macro aspects of the world are being taken care of by the political and economic leadership. Well, this crisis has proved them wrong.

The senators are staging a spectacular drama by grilling the fat-cat CEOs to demonstrate that they are the protectors and saviors of the people. I wonder what these protectors and saviors were doing when complex financial instruments were developed in the name of innovation.

Karl Polanyi, with extraordinary prescience, warned that the crisis would come; he rejected the idea that the market is a “self-regulating” mechanism which can correct itself. There is no “invisible hand” such as the neoliberals maintain, so there is nothing inevitable or “natural” about the way markets work: they are always shaped by political decisions.

In the name of "Weapons and of mass destruction”, a meaningless war was waged against the so called “Islamic Terrorism” that was seen as a threat to the western civilization. A doomsday scenario that poses a far greater threat to the western civilization had been gaining momentum right next to Ground Zero, in Wall Street.
The author compares this corrupt mythology (neoliberalism) to that of the Aztecs. The scary ending is that, like that of the Aztecs, this collapse of the corrupt mythology may require a lot of human sacrifice.

The incident of the 45 year old Indian (in the US) killing all his family members (wife, three sons and mother-in-law) and himself is a poignant reminder of the beginning of just that.

Related Books
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1) The Great Transformation (Karl Polyani), published in 1944, an economic history which sets out to explain 1929, the Great Depression and rise of fascism.

2) One Market Under God (Thomas Frank) published in 2001, explains how neoliberalism entrenched its triumphalism into the political system of the U.S.

Thursday, October 2, 2008

Running the Red Light

It was 2 am on a Saturday morning when the alarms went off. Although the alarm’s pleasant tone was no music to my ears, I jumped out of my bed to be on time to receive my parents at the airport. As I was mulling over a backup plan for the cab that I had arranged for 2.30 am (to avoid an IST – Indian Stretchable Time – disaster), I got a call from the cab driver. “Sir, I am waiting for you at the front of your apartment complex.” Not a bad start.

As we started moving into the dark streets, I was enjoying the tranquility in the streets. No traffic. No noise. However, as usual, I have always dreaded driving in the night as the reckless drivers run the red light as if they were absolutely sure of the future. My cab driver was no angel. He was running the red light all the time.

Then this amazing incident happened. As we were approaching a set-of-lights at the TIDEL (start of IT Highway in Chennai) the light turned red. I could barely see any movement of life anywhere in the vicinity. On seeing the ‘red’, I noticed the driver shifting to a lower gear. I thought he was just going to increase the speed. The driver slowed down and stopped at the set-of-lights. My dazed eyes widened and focused on the driver.

The driver was very calm and looked as if he had never run a red light. Now, he can’t fool me. The driver read my intrigued face and pointed me to a bunch of people standing at the set-of-lights. Cops!! No guns!! Instead, Cops with a note-pad and a pen!! I looked back at the driver with a “So??” face. The driver said, “If you run the red lights, you will receive a bill for Rs. 1,500.” I was in for a shock. I pinched myself. Sure, I was not dreaming. I was not driving on “Armstrong Boulevard” in Canada.

I could not control my excitement. I was very happy to see the enforcement working. My excitement intrigued the driver. I don’t think he ever understood why I was so happy.

I used to tell my friends that it would be a miracle to see some disciplined public system in my life time. Now, this incident is not only a proof that enforcement of law can work anywhere in the world, it also gave me a glimmer of hope that things will change for the good in India sooner than later.

Wednesday, September 24, 2008

Conservatism: A fundamental aspect of Capitalism

The last giants standing, Goldman Sachs and Morgan Stanley, that have become deposit-taking banks is a significant milestone in the history of American Banking Reforms. This is exactly the opposite of what happened after the Great Crash of 1929.

One lesson that is to be remembered by the entire human race across any industry is that there are certain areas that cannot be left to the market forces to decide. For instance, the monitoring of Investment Banks by SEC. SEC is headed by executives that are influenced by the Investment Banks. Having preached the rest of world about regulation and compliance, it is a harsh reality to face in their own backyard. Thanks to ‘ruthless capitalism’, lobbying at the highest levels have undermined the interests of the common public across the globe.

The US government stepping in to control the major banking bodies, rather than outsourcing the control to SEC, is a good sign, assuming that the vicious cycle will not continue. Hank Paulson’s new state-owned organization that will have to convince a lot of key people on both sides of the aisle to print USD 700 billion (to buy all the toxic mortgages) is untypical of capitalism. Irrespective of the chaos and remedial proposals, the damage is already done to all geographies of the globe. The worst affected is the US public that are caught between unpaid mortgage bills and the mounting public debt (USD 11.3 trillion) that will be left for their future generations to pay. And we have not even begun to understand the current status of this monstrous turmoil that is complicated by complex derivatives.

Institutions with a conservative approach, simpler business models and meticulous management are the new heroes of today’s market.

Does this word ‘conservative’ sound familiar?

Tuesday, September 23, 2008

The sub-prime crisis

What is a sub-prime loan?

In the US, borrowers are rated either as ‘prime’ - indicating that they have a good credit rating based on their track record - or as ‘sub-prime’, meaning their track record in repaying loans has been below par. Loans given to sub-prime borrowers, something banks would normally be reluctant to do, are categorised as sub-prime loans. Typically, it is the poor and the young who form the bulk of sub-prime borrowers.

Why loans were given?

In roughly five years leading up to 2007, many banks started giving loans to sub-prime borrowers, typically through subsidiaries. They did so because they believed that the real estate boom, which had more than doubled home prices in the US since 1997, would allow even people with dodgy credit backgrounds to repay on the loans they were taking to buy or build homes. Government also encouraged lenders to lend to sub-prime borrowers, arguing that this would help even the poor and young to buy houses.
With stock markets booming and the system flush with liquidity, many big fund investors like hedge funds and mutual funds saw sub-prime loan portfolios as attractive investment opportunities. Hence, they bought such portfolios from the original lenders. This in turn meant the lenders had fresh funds to lend. The subprime loan market thus became a fast growing segment.

What was the interest rate on sub-prime loans?

Since the risk of default on such loans was higher, the interest rate charged on sub-prime loans was typically about two percentage points higher than the interest on prime loans. This, of course, only added to the risk of sub-prime borrowers defaulting. The repayment capacity of sub-prime borrowers was in any case doubtful. The higher interest rate additionally meant substantially higher EMIs than for prime borrowers, further raising the risk of default.
Further, lenders devised new instruments to reach out to more sub-prime borrowers. Being flush with funds they were willing to compromise on prudential norms. In one of the instruments they devised , they asked the borrowers to pay only the interest portion to begin with. The repayment of the principal portion was to start after two years.

How did this turn into a crisis?

The housing boom in the US started petering out in 2007. One major reason was that the boom had led to a massive increase in the supply of housing. Thus house prices started falling. This increased the default rate among subprime borrowers, many of whom were no longer able or willing to pay through their nose to buy a house that was declining in value.
Since in home loans in the US, the collateral is typically the home being bought, this increased the supply of houses for sale while lowering the demand, thereby lowering prices even further and setting off a vicious cycle. That this coincided with a slowdown in the US economy only made matters worse. Estimates are that US housing prices have dropped by almost 50% from their peak in 2006 in some cases. The declining value of the collateral means that lenders are left with less than the value of their loans and hence have to book losses.

How did this become a systematic crisis?

One major reason is that the original lenders had further sold their portfolios to other players in the market. There were also complex derivatives developed based on the loan portfolios, which were also sold to other players, some of whom then sold it on further and so on.
As a result, nobody is absolutely sure what the size of the losses will be when the dust ultimately settles down. Nobody is also very sure exactly who will take how much of a hit. It is also important to realise that the crisis has not affected only reckless lenders. For instance, Freddie Mac and Fannie Mae, which owned or guaranteed more than half of the roughly $12 trillion outstanding in home mortgages in the US, were widely perceived as being more prudent than most in their lending practices. However, the housing bust meant that they too had to suffer losses — $14 billion combined in the last four quarters - because of declining prices for their collateral and increased default rates.
The forced retreat of these two mortgage giants from the market, of course, only adds to every other player’s woes.

What has been the impact of the crisis?

Global banks and brokerages have had to write off an estimated $512 billion in sub-prime losses so far, with the largest hits taken by Citigroup ($55.1 bn) and Merrill Lynch ($52.2 bn). A little more than half of these losses, or $260 bn, have been suffered by US-based firms, $227 billion by European firms and a relatively modest $24 bn by Asian ones. Despite efforts by the US Federal Reserve to offer some financial assistance to the beleaguered financial sector, it has led to the collapse of Bear Sterns, one of the world’s largest investment banks and securities trading firm. Bear Sterns was bought out by JP Morgan Chase with some help from the Fed.
The crisis has also seen Lehman Brothers - the fourth largest investment bank in the US - file for bankruptcy. Merrill Lynch has been bought out by Bank of America. Freddie Mac and Fannie Mae have effectively been nationalised to prevent them from going under.
Reports suggest that insurance major AIG (American Insurance Group) is also under severe pressure and has asked for a $40 bn bridge loan to tide over the crisis. If AIG also collapses, that would really test the entire financial sector.

How is the rest of the world affected?

Apart from the fact that banks based in other parts of the world also suffered losses from the subprime market, there are two major ways in which the effect is felt across the globe. First, the US is the biggest borrower in the world since most countries hold their foreign exchange reserves in dollars and invest them in US securities.
Thus, any crisis in the US has a direct bearing on other countries, particularly those with large reserves like Japan, China and - to a lesser extent - India. Also, since global equity markets are closely interlinked through institutional investors, any crisis affecting these investors sees a contagion effect throughout the world.

Monday, September 22, 2008

A matter of principle....

Having lived in Chennai for almost two years, I am very wary of people trying to make a killing for even the simplest service that they offer.

One of my relatives had offered to send three laborers to help me move to another apartment. Although I completely trusted my relative, I was very wary of these laborers. They were quite professional and quick in moving. I deliberately dealt with them seriously to avoid any exploitation.

As they had finished their work, I acknowledged the completion of work and went inside to fetch my purse. Having gone through some nasty haggling experiences, I was prepared with exact change in my hand and another set of money in my back pocket for the final part of negotiation. When I came back to the front door, to my surprise, I saw them walking away. I hurriedly called for them and offered them money. With a grim face they refused to take the money. I knew that they were about to create a ruckus. As I read their faces, I realized that their faces did not exactly reflect their gesture of refusing the money that was offered.

“Sorry sir, we will not take any money.” For a minute, I felt very ashamed for being prejudiced. I insisted that I will talk to their owner. They refused again. I called my relative and told him that whatever I am giving is in addition to the actual fee that will be invoiced to me. The best was yet to come. What my relative told me truly blew me away. He said, “Praveen, even if I ask them to take money, they will not take money.” I was stunned at the principle that those laborers demonstrated. Perhaps, the highly paid executives at Lehman Brothers, Merrill Lynch and AIG have something important to learn from these poor laborers who survive on daily wages.
Now, I was very determined to pay them double. My persistent nagging and pleading made them accept the money with much reluctance.

I called my relative again and told him how impressed I was with his management skills for without his superior people management skills, he would not have a great team that has, perhaps, never stepped inside any kind of school in their lives. For those poor laborers, after a long day of hard work, more than any material rewards, what mattered most was the principle that they live by every day.

Tuesday, September 16, 2008

My Hero Across The Street

I was seven years old and it was a sunny day in Tuticorin where I was going in a cycle-rickshaw with an uncle. He asked me what I wanted to be. I told him that I wanted to be an Engineer. He asked me why I wanted to be an Engineer. I told him that I wanted to be an Engineer so that I can become like my uncle. After several years, this event made me realize that I am nobody if I had not lived across the street of this great man. Several years later, amazingly, with out preparation, I quoted my uncle, during my M.B.A interview, when they asked me why I wanted to pursue M.B.A. That moment I knew who was behind my success all the time. The intriguing thought is that he has never once motivated me verbally. It is probably his imperious look that did all the talking to me.

I have watched him every single morning, afternoon and evening, kick-starting his scooter and zooming to work like a young boy. He would not bother opening the gate for him because he knew I would come running on hearing the soaring sound of his scooter.

Fear was not part of his vocabulary. Once a policeman came to his doorstep and demanded for some money. I was really scared and amazed to watch him threaten this poor policeman. Another time, it was in Madras where I was ferrying him around the city for his errands in a scooter. He asked me to slow down by a coconut vendor for directions. As a faithful servant, I stopped as instructed. There was a muscular coconut vendor with a knife in his hands and, obviously, he did not appreciate the greatness of this man. Having known my uncle for years, I was not the happiest kid on earth at that moment. Even today I remember the way uncle spoke with this vendor and the startled look on this vendor’s face. Within a few seconds, the tough-speaking vendor became very obliging and I still remember the look on his face that said, “Wow, this must be a big person”.

As I continued to chauffer him in the scooter, we went past a College. And, that is when he told me this amazing story. This is about a small boy whom uncle took under his wings. He cared for this little boy and cared for him just like his own son. This little boy became a man. This man struggled with his studies at that time for various reasons. But, uncle never gave up on him and would never agree for this man to fail. Today that boy is a very successful man. He even has uncle’s name as his initial. He is no other than my dad. If my uncle had not done that for my dad, I am nothing today. Not many people know the good side of this great man. Later on, I learnt that uncle’s mum died on periyappa’s lap asking uncle to promise that he will take care of his brothers. So he did.

As my uncle has passed away, I thought of writing a few words because of two reasons. One, I am sad. Second, I want to make sure that my kids know that we once knew a legend in our family.

There is no end to talk about his greatness. There are some incidents that cannot be told. I will treasure those thoughts and hold it dear to my heart.

Curious Minds

It is fascinating to watch our little ones with curious minds. Anyone who would glance at my son’s face would say, “Boy! This guy must be naughty!!” Well, that’s a truth that we dreadfully endure every single day. He is three and half years old. He has, so far, broken his collar bone, sprained his neck, hands and legs and, last week, he got his feet stuck in the rear wheel of a bicycle. After an X-ray, we were relieved to know that there was no fracture. His hands and legs are spotted with scars. He is a full time job. During our first parents’ meeting at my son’s school, as we were watching the teacher expressing her concerns, quite generously, to other parents, I told my wife, “Well, your son is no angel. Don’t’ expect any accolades. It is going to be a long day.” Understandably, the teacher did not wear a smile for most of the time. When it was our turn, my wife and I were exceptionally focused and were prepared for the long list of complaints. The teacher smiled at us and said, “No problem. He is a good kid. You can go.” Stunned!! I had every reason to believe that the teacher had mistaken us for some other kid’s parents. As the teacher read our perplexed faces, she said, “why? Is Abrie naughty at home?” I was very proud of my son until he started his rampant stunts inside the car on our way back home.

This guy is full of surprises. Last week, the teacher had asked my wife to wait so that she could have a word with my wife. Since my wife is the PTA (Parents Teachers Association) rep, my wife also had a few matters to discuss with the teacher. To her surprise it was not for the PTA. It was a complaint against my son.

That early morning, he had raised his hand to say something. He stood up and showed an object that completely perplexed the teacher. It happened to be a “weight” of a pressure cooker. My wife’s meticulous preparation, especially in terms of child safety, for my son is exceptional. What made him carry that? When did he get that? Why? How? All these questions are still a mystery to us.

His curiosity intrigued me and cracked me up. Thanks to his curiousness, he now goes through a security clearance procedure, including strip-searching, before leaving for school. And I am sure he is breaking all the security codes all the time.

Sunday, September 14, 2008

Forces of Nature

I have had the privilege of acquainting with many true friends in my life. I have lost some good friends too. Not due to a strained relationship though.

Subconsciously, I had shied away from few friends and have regretted immensely. However, not surprisingly, when I have had ran into a lost friend after many years, we have had connected instantly and exchanged pleasantries about how it seemed as if we had been in touch every single day.

Boston, MA - August 15, 2001: My friends and I stepped out of the office to a mall in Beverly. As we were driving in my friends Explorer, we casually discussed about starting a non-profit organization to help the downtrodden in India. As we were seated in one of the tables in a food court at a Mall in Beverly, (Boston, MA), we jotted the plan on a paper-tissue and little did we realize that our dreams would transform into a non-profit organization called Next Generation Foundation. Frankly, I was basking in the steadfast dedication of my friends, who considered helping the under-privileged kids as something that was larger than life. Over the years, although, initially, I was actively involved in the organization, I had shied away from the mainstream activities and gradually disappeared into obscurity.

Chennai - July 2008: I was enjoying my morning walk, by the coast in Chennai, snaking through the regulars (walkers), with my face down trying to concentrate and visualize a positive future. A loud, gruff voice called out my name with such firmness so much so that the person cannot be a stranger. As I was jolted out of my deep-thoughts, it took me a few seconds to collect my thoughts and respond. It was no other than the friend in Boston who was vacationing in Chennai. I had moved to India in 2006. Imagine this!! My friend is living in Boston and I am living in Chennai. We lost touch and here we are standing in front of each other, absolutely stunned by the sheer “Forces of nature”. It was a mind-blowing experience and the best was yet to come.

Since the moment I had disappeared into obscurity, my friend had pursued me many a times to get active with our organization that we founded so passionately. Although there was not a day that went by when I had not felt guilty about my silence, I had conveniently shied away unabashedly. Unsurprisingly, we connected instantly and I was hooked again. Perhaps, it was the bottled energy and emotions that made me embrace the opportunity with all my heart.

I felt liberated and I made peace with myself about a passion that I once pursued so vividly, but failed to follow through.

As we exchanged pleasantries on that beautiful morning in the beach, my friend casually talked about the “Dharma Yuga” project and how that can be coupled with an exchange program across schools in India and the US. I was impressed and wanted to be part of the action again. A residential school has shown interest in participating in the exchange program. As part of the program, the school would help educate over 1000 poor children.

Next Generation Foundation (NGF) is a socio-charitable organization striving to create a revolutionary drive within people to make the social changes that humanity needs. One of our missions is supporting education of underprivileged children. NGF is built on the foundations of peace and prosperity to all of the humanity. We believe that every child across the world should have the equal and fair opportunity to choose their own destiny and build a better future for mankind. We have taken our first step towards this belief. We have started with our home, India, by extending help to the underprivileged children living in this world's largest democracy. In the long-term we should be able to extend charitable help to other parts of the world. Come and join us in this revolution. (www.nextgenfoundation.org)

It is amazing to think of a natural or spiritual force that would pull some strings to orchestrate the daily events of human life. Well, this time, I am glad it was for a happy eventful morning.

Tuesday, August 26, 2008

Indian Banking: modular approach vs. customer service

A few Indian Banks have embarked on a modular approach to tap the extraordinary market of both banked and largely unbanked population in India. At the same time, these banks are slipping on “trustworthiness”, “brand image” and are well aware of the growing “customer dissatisfaction” towards their services. I have had my own share of experiences that, in comparison to my experiences in banks in other geographies, is a grim reminder of the milestones far ahead.

Digital Credit Union (DCU), USA
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DCU, an internet only bank, is the only bank with which I have some very pleasant memories of banking. It has a modular approach and perhaps the best bank for small-time customers that are ignored by big banks.
• Modular approach that encourages modularity and commonality
• Optimized System: Very consistent service across phone and internet.
• Human interaction is professional, empathetic and customer-friendly.

The Royal Bank of Canada (RBC), Canada
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Most of the interaction was over the phone except for a couple of meetings in person. Overall, it was a very painless experience as appointments were on time, tasks executed as scheduled by the bank. The entire lifecycle was very well streamlined and, perhaps, it is an excellent example of a system orchestrated by straight-through processes.
• Modular approach that encourages modularity and commonality
• Optimized system: Experience of a consistent service across different channels.
• Human interaction is professional, empathetic and customer-friendly.

ICICI Bank, Canada
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This was a very intriguing experience on both positive and negative notes. On a positive note, the loan process was complete without even a single meeting with a human. That was fantastic!! On a negative note, the communication bottlenecks, in terms of improper acknowledgements and inaccurate information, almost nullified the positive experience.
• Modular approach that encourages modularity and commonality
• Not-so-optimized system: Experience is inconsistent across different channels. Inadequate training of staff is a major factor.
• Human interaction is fairly professional, hardly empathetic and relatively better in customer service.

ICICI Bank, India
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ICICI Bank is one of the very few banks that demonstrate that they do attempt to improve their service. However, whenever I enter any ICICI bank I am wary of people that aggressively sell various products like personal loans, credit cards, insurance etc.,. Too many customers, enticed by misleading offers, have ensured a fairly large customer base and, consequently, the IT platform and the environment is unable to support the customer base. “Customer churn” is obvious and is definitely a threat that needs to be addressed pro-actively.
• Modular approach that encourages modularity and commonality
• Not-so-optimized system: Experience is inconsistent across different channels. Inadequate training of staff is a major factor.
• Human interaction is relatively better. A lot more improvement is required to sustain the growth going forward.

State Bank of India, India
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Describing the experience as “Stone Age” is perhaps an overstatement. However, the customer service was dismal right from the beginning. One would hardly have an opportunity to feel like a customer because one is not treated like a customer.
• “Silos” is the name of the game.
• The idea of “Optimization” is farfetched.
• Human interaction is pathetic. An employee definitely feels like a customer.

To be fair, ICICI Bank is leading the banking industry, in India, in terms of modularization, customer service and globalization. While we pat ourselves on our back for our achievements in the banking industry, we need to set global benchmarks. ICICI bank, India’s largest commercial bank with a market capitalization of $25 billion, is only one tenth the size of Citibank. China has five banks in the top 50 global list while India has none.

Indian banks have a great opportunity to grow where ninety percent of the population uses no bank to open a bank account. The advancement in mobile banking promises a revolutionary way of banking with the 270 million odd mobile subscribers and an innovative channel to reach the unbanked population.

The bank with a SOA based platform that can help sustain the balance between modular banking and customer service has a great potential to be a market leader.

Tuesday, August 19, 2008

We bring it on ourselves....

I was window-shopping with my wife in T-Nagar (most crowded place in Chennai). Surprisingly, it was a very pleasant experience and I wanted to stay in T-nagar for a long time. It was very crowded, but it was very organized. The vehicles yielded to pedestrians that were waiting at a cross-path junction. The pedestrians crossed the road on the designated cross-path. The best part was that there was not even in a single vehicle honking!! No dust!! Less pollution!! Very hot though. I see people taking the time to walk to a garbage dump to dispose a small piece of chocolate paper. No spitting!! I watch people smiling and exchanging pleasantries. It was a beautiful day. My wife and I spotted our favorite food-joint and seated ourselves in a corner table. As I was excitedly thinking of my favorite “chilli porata” that I could order, my son performed a “kung fu” stunt and slammed on my face. I woke up from my nap. The physical impact of “slamming” was so much so that I could barely recall most of the incidents in my fabulous dream.

I know. Wouldn’t that be great? The everyday challenges that we go through just to co-exist in the world’s second most populous country makes us tired, unpleasant and unhealthy. The common reasons that we give: the government, the beggars, the cyclists, the auto, the illiterate, the laborers etc. I hear all the time that it is due to lack of education. I think it is more than education. I see educated people (that I know) throwing garbage from their Skodas and Accords. It is the attitude that matters.

There are a plethora of problems in India that are very complex and will take several decades or perhaps centuries to overcome. However, there are some simple behavioral changes, at least among the so called “educated” circles, can bring a world of difference. For starters, it is to consciously litter at designated places. It is not uncommon to see people throw garbage from the tenth floor of their posh apartments. What a disgrace?!

I am really proud of my neighbor who had invited the garbage disposal company to our apartment to discuss recycling options. Thanks to this good Samaritan, our entire apartment complex, uses the recycling bin.

If we could only reflect on the disregard for anything that we demonstrate in our daily grind, a major part of our discomfort and annoyance can be avoided. It is not the system that is to be blamed for all problems. A good system is not a panacea. There are many avenues to avoid problems that we bring it on ourselves.

Monday, August 18, 2008

We regret that your Card has been rejected.

Unsolicited calls from credit card companies have become more of an annoyance that sometimes even infuriates customers, especially in India, as telecom regulations barely protect the consumers. It is exacerbated by unsolicited calls to customers for whom the same bank had rejected, a week back, the application for a credit card. As the customer furiously confronts the call-rep, the call-rep unabashedly says, “Sir, I am not calling from HDFC. I am from a different company. I am only selling HDFC cards.”

Am I missing something?!!!

Banks, in order to market their products, have adapted their business models to collaborate with third-party vendors/companies. The bank’s IT infrastructure does not support a platform that is easy to integrate among internal systems, let alone the external systems.

There are two levels of bottlenecks: internal and external.

Internally, the systems operate in silos which are a perfect recipe for a 0` customer view. Let alone the third-party vendor, even the bank’s internal systems will not be able to provide a 360` degree view of the customer.

Externally, if the IT infrastructure does not support a system to provide a 360` view of the customer, the business model fails. Easy and effective integration with third-party systems should be a precedent to collaboration with third-party vendors.

Banks like ICICI and HDFC have come a long way in evolving their IT infrastructure that is inclined towards a modular approach. However, it is not uncommon for customers to experience inconsistent service across different channels. The reason is that these systems are not optimized enough to provide a consistent service to the customers.

Banks, with a 360` view of the customer, not only have a great potential to grow but also have an opportunity to reduce cost by avoiding unnecessary processing of loans, cards etc.

Business Intelligence that is based on SOA and a well-integrated system is the only hope for banks to improve customer service with higher cross-sell rates.